Net Biz: The "death" of Foursquare may have been greatly exaggerated
In the spring of 2016, Foursquare CEO Jeff Glueck went on CNBC to make a bold prediction: Chipotle comparable sales would fall by 29 percent in its first quarter. The network’s anchor seemed skeptical. The fast-food chain was reacting to some health scares at the time, but no one was predicting nearly as steep a drop in revenue. “What is the technology here? What have you got that enables you to do this?” the anchor asked.
Glueck was basically fishing for this question. Foursquare had reinvented itself as a location intelligence company for business, but it was in the painstaking process of shaking off its image as a forgotten consumer app. Glueck had been making the rounds for less than a year, seeding the market with all kinds of predictions based on his company’s data -- how many new iPhones Apple would sell, or how well McDonald’s all-day breakfast launch was going. The Chipotle forecast was the boldest yet, and it held true. Two weeks after Glueck’s appearance on CNBC, the Mexican eatery reported sales had fallen 29.7 percent from a year earlier.
Boom. Foursquare for the win.
Glueck’s Nostradamus act was a long time in the making -- the result of a process that was set in motion four years earlier, in 2012, when Foursquare cofounder Dennis Crowley began looking for help in turning his company around. The startup had accumulated mountains of data about where people shopped and traveled but hadn’t figured out how to monetize it. Today, that puzzle seems to have been solved: Foursquare is on the path to $100 million in revenue, and profits are within sight for the first time. But a shift like this wasn’t easy -- because as Crowley and his new leadership team discovered, it takes more than just a good insight to jump-start a company’s growth. First, the entire company and its culture must be reshaped to fit a new vision.
Foursquare had launched in 2009 with enough hyperbole to buoy an aircraft carrier. It was essentially a digital layer atop the real world -- encouraging people to “check in” wherever they went, announcing their movements throughout the day. Someone is at Dunkin’ Donuts. Now the gym. Now their favorite brunch place. The reward for sharing? Stickers. Badges. Friendly competition to become the mayor of a favorite bar. And, critically, being part of a community of people sharing recommendations on the best of everything around them.
But despite its cultural domination, the app just couldn’t translate into a lasting business. Its tens of millions of users never became hundreds of millions. After a few years, engineers were leaving for other startups. Users became less active, and Foursquare began to feel like the mess left behind from a really great party. Employee morale was low. Nonetheless, investors stood by patiently, pouring money into the app again and again -- perhaps, as one wag put it, because everyone thought you’d have to be a moron to fumble the business.
In 2012, Crowley turned to Steven Rosenblatt, a startup warrior and advertising executive from Apple, to solve the puzzle. He’d run the tech giant’s advertising platform, iAd, and was looking forward to a long summer break with his wife and young kids. He figured he’d spend a few months as a part-time Foursquare adviser, and that would be that